- A deeper support comes as 0.6720 and resistance is located at 0.6860.
- 0.6785 is where the 10-D SMA is located and bears are looking for closes below there to confirm a continuation of the downside.
- NZ CPI: Traders are looking for a positive outcome, whereby inflation on an annual term for a lift to 1.6% as a market consensus for Q2.
NZD/USD has stabilising above the descending channel's prior resistance with a test of the 10-D SMA at 0.6785 having made a high of 0.6793 and a low of 0.6758. The greenback, however, was edging higher into the key data today and capped the pair at the 200-hr SMA, (0.6793).
However, analysts at ANZ explained that a weaker USD was the dominant theme overnight, seeing the NZD grind a little higher. "Direction today will no doubt be determined by the local CPI figures, which if ANZ is correct, should see the NZD testing support again. Any in-line or upside surprise could result in a decent squeeze higher," the analysts added.
NZD/USD CPI
Traders are looking for a positive outcome, whereby inflation on an annual term for a lift to 1.6% as a market consensus for Q2, on the way to 2% by year-end, likely to be driven by oil prices, firming domestic capacity pressures and a recent softening in the bird, (dollar fulled). However, where the market will be convinced that the RBNA will wish to act on such an outcome is another matter which, will ultimately be the driver of the Kiwi where core prices will remain below the RBNZ's midpoint of the inflation target. The RBNA is not expected to raise rates until Autumn in 2019.
NZD/USD levels
A deeper support comes as 0.6720 and resistance is located at 0.6860 (21-D SMA 0.6817). 0.6785 is where the 10-D SMA is located and bears are looking for closes below there to confirm a continuation of the downside and back into the bearish channel. 0.6920, however, would put the bulls back in control and the June highs will be up for grabs. However, bulls really need to get above the 200-month moving average resistance at 0.7007 to stave off bearish pressures.
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